Insolvent ( Bankruptcy) Law and Legal Definition
“The term "insolvent" means--
(A) with reference to an entity other than a partnership and a municipality, financial condition such that the sum of such entity's debts is greater than all of such entity's property, at a fair valuation, exclusive of--
(i) property transferred, concealed, or removed with intent to hinder, delay, or defraud such entity's creditors; and
(ii) property that may be exempted from property of the estate under section 522 of this title [11 USCS § 522];
(B) with reference to a partnership, financial condition such that the sum of such partnership's debts is greater than the aggregate of, at a fair valuation--
(i) all of such partnership's property, exclusive of property of the kind specified in subparagraph (A)(i) of this paragraph; and
(ii) the sum of the excess of the value of each general partner's non-partnership property, exclusive of property of the kind specified in subparagraph (A) of this paragraph, over such partner's non-partnership debts; and
(C) with reference to a municipality, financial condition such that the municipality is--
(i) generally not paying its debts as they become due unless such debts are the subject of a bona fide dispute; or
(ii) unable to pay its debts as they become due.” (11 USCS § 101)
